Shark Tank star and the owner of the NBA team Dallas Mavericks, Mark Cuban, says recent blowups in the crypto space, including the FTX implosion, “have been banking blowups,” not crypto blowups. He also explained why he invests in crypto.
Recent Explosions Aren’t Crypto Specific
Mark Cuban pointed out on Twitter on Saturday that the FTX explosion is not a crypto explosion. Commenting on why the collapse of the crypto exchange signaled a turning point in the industry, Cuban tweeted:
These blowups have not been crypto blowups, they have been banking blowups.
“Lending to the wrong entity, misvaluing collateral, arrogant arbitrage, goes after the depositor,” the Shark Tank star elaborated. “Look up long-term capital, savings and loans, and the sub-prime blowup. All different versions of the same story.
Many people on Twitter agreed with Cuban. One user described: “There was nothing specific about crypto … Other recent blowups (3AC, Celsius, Voyager, Blockfi) were all essentially tradfi-style blowups too (too much leverage, bad collateral, poor hedging of liabilities from client deposits, fraud).”
Kevin Hobbs, CEO of Aventus Ventures, wrote: “It’s true. It’s the centralized so-called crypto companies that are heavily invested in by bankers, run by ex-bankers, ex-SEC, CFTC, government, that have done all the most in crypto. True decentralized finance (DeFi) is “necessary for today’s world with new regulations,” he said.
The host of the Thinking Crypto podcast, Tony Edward, concurred with Cuban, stating:
Mark is here. This was not a crypto failure but taking advantage of investors and a lack of regulation. Bitcoin, Ethereum, XRP, the ADA blockchain, etc. are all in the keel. It will take time and a major brand institution for crypto adoption to build trust again with the mainstream.
Why Mark Cuban Invests in Crypto
In another tweet, Cuban shared why he invests in crypto despite recent market sell-offs following the FTX failure. The Dallas Mavericks owner tweeted Sunday:
One basic question. Why have I invested in crypto? Because I believe smart contracts will have a significant impact in creating valuable applications.
“I have said from day one, the value of a token is derived from the applications that run on its platform and the utility they create,” he clarified.
